THE TRAIN RIDE THAT CHANGED THE COTTON BUSINESS

IN THE EARLY DECADES of this century, traveling from one Delta plantation or community to another was still a challenge. Packet steamers carried people and goods up and down the Mississippi and its main tributaries. Greenwood, Belzoni and Yazoo City shipped cotton and other goods down the Yazoo River to Vicksburg and then into the Mississippi River system. But most people relied on the railroad, especially for dependable travel to Memphis.

The Columbus and Greenville Railroad (later the Southern Railroad) carried Delta travelers east to Columbus and west to Greenville and the Mississippi River. At Moorhead, the Southern intersected with the Yazoo-Delta Railroad, whose initials earned it the nickname of the "Yellow Dog" Railroad. The Moorhead intersection of the two, 'Where the Southern Crosses the Dog,' was immortalized in Delta blues lyrics and in Memphis artist Carroll Cloar's famous painting of that name.

The Yazoo-Delta Railroad and the Illinois Central system provided connections between the Delta and Memphis, enviously dubbed "the biggest town in north Mississippi." For one Leflore County cotton grower, a railroad journey to Memphis was also the source of an experience that changed forever the method of marketing cotton.

A FATEFUL CONVERSATION

Oscar E Bledsoe, Jr. farmed several thousand acres of cotton at Shellmound, north of Greenwood. Like many of his fellow producers, he suspected the existing marketing system was costing him more than the service needed to. His suspicions were confirmed during the 1919 harvest season.

As he settled down aboard the train for the long, slow train ride to Memphis one hot, dusty autumn day, he could not fail to overhear two Memphis cotton merchants seated near him swapping stories. Decades later, that tale continues to be retold.

One of the cotton merchants was bragging about how he had made his year's entire salary in one deal with a Mississippi cotton producer. The more Oscar Bledsoe overheard, the more he realized his crop was one of those on which the sharp merchants had made a killing.

Too shrewd a businessman to let the issue drop, Bledsoe began exploring alternate ways to market his cotton. A cooperative marketing organization was his answer. The concept that prospers today as the world's oldest continuous cotton marketing cooperative had begun to take shape. At his own expense, he hired Californian Aaron Sapiro to help him create the organization.

Having come this far, it did not take Oscar Bledsoe long to give voice to the fundamental trouble. He and his fellow Mississippi Delta cotton producers were operating under a system which allowed them no voice whatever in setting the price of what they had to sell. They could not even counsel with someone about what the price should be. The buyers, frequently personal friends, could not help. They could only show a telegram, and commiserate with them over the price.

Bledsoe also saw there was absolutely no relationship between what it had cost him to produce his cotton and the price he was offered for it. He knew he was helpless to do more than temporarily refuse an offer. Financial necessity would soon force him to sell.

The very nature of the situation meant cotton growers were constantly and inevitably engaged in disordered and unfair competition with each other. Disgusted with the small premium on staples, they would ignore desirable seed varieties and continue to plant short staple cotton.

Even under normal conditions there was a steady dumping of the crop in the market during the early weeks of the season. Where planters were in position to make financial arrangements enabling them to carry their crops, this was done without method and without definite objective. This course was often prompted by a feeling of instinctive rebellion against conditions which seemed unreasonable and ruinous, accompanied by a blind hope of improvement in time.

Cotton growing for Delta producers early became an intelligent occupation. Cotton marketing, however, remained a haphazard game of chance. Genuine, conservative prosperity, except in comparatively few individual cases, did not exist among Delta cotton growers. Inflation during World War I only aggravated the situation.

Cotton harvest time in the first two decades of this century was an elaborate chess match. It pitted producers against the weather, against each other for gin capacity, and against the vagaries of the cotton factors and the mill markets they represented.

Rarely could a planter count on a favorable combination of harvest season weather, gin capacity and rising market prices to give him the profit nonSoutherners presumed when they thought of plantation life.

Many planters suspected the marketing system was the culprit. They could not know for sure. Here was, after all, an economic system where the planter purchased his input at retail prices, sold his production at wholesale prices and had to pay the freight in both directions.

A PLAN EMERGES

Once Oscar Bledsoe determined a course of action, he began testing the idea on his fellow Delta cotton producers. He talked with LeRoy Percy, a former United States Senator, Greenville attorney and planter at Trail Lake in Washington County; Alf Stone, planter at Dunleith between Indianola and Leland; and Oscar Johnston, a Clarksdale attorney.

Although not the first to realize the advantages of cooperative marketing, Staplcotn's organizers were among the first to recognize the desirability of marketing a highly specialized product, such as long staple cotton, in a highly specialized manner. They immediately seized upon the principle of cooperation as the solution to many of their problems.

Long staple cotton, along with other agricultural commodities, had suffered from serious price declines in the depression which immediately followed World War 1. Long staple cotton had definite characteristics which should have brought higher relative prices than other types of cotton. This cotton had relatively better spinning quality than most other staple types in the country at that time. The Mississippi Delta produced about 45 percent of the total United States long staple crop and about 21 percent of the world supply.

Before the April 12, 1920 meeting of the American Cotton Association in Montgomery, AL, a cooperative marketing plan had been devised by Bledsoe and the others.

It wasn't long before ten Delta planters had each underwritten a thousand dollars as seed money for the yet-to-be- born organization. The personal underwriting by the first organizers attracted other key members in neighboring communities.

The plan of the Association was explained to Delta growers at three general meetings during the summer of 1920, and a committee of organizing directors was formed in July.

At its inception, Staplcotn was organized by means of a "standard" contract suggested in Aaron Sapiro's plan of organization. Sapiro's first work with a Texas association in 1920 was to devise such an instrument. His discussions with Oscar Bledsoe emphasized the necessity of a comprehensive, legally enforceable contract to govern all relations between members and the Association.

At the same time growers signed the "standard" contract, they were asked to also sign a marketing contract. The "standard' contract stipulated that if at least 200,000 bales were represented before September 15, 1921, membership in the Association would become operative. The 200,000 bale goal was based on the Delta's 1916 through 1919 crop figures. Growers had the option to withdraw if that figure was not reached, and all contracts were void unless at least 100,000 bales remained.

When the campaign for membership closed in May 1921, 1,800 signers representing 216,000 bales were on the rolls. This was 16,000 bales more than specified in the contract as a minimum, and the organizers considered the endorsement of their plan to be whole-hearted among the greater part of the Delta growers.

In 1921, Mississippi law did not permit a group of cotton growers to form a cooperative selling organization. Oscar Bledsoe and Staplcotn's other early leaders did not ask or wait for the necessary action on the part of the Mississippi legislature. They did what others have made common practice in other types of businesses. They went to a neighboring state to take advantage of more favorable laws relating to corporations.

On May 23, 1921, five Mississippians appeared in Nashville before Tennessee Secretary of State Ernest N. Haston to file articles of incorporation for Staple Cotton Cooperative Association. Signing the incorporation papers were Oscar R. Bledsoe, Jr. of Shellmound, Senator LeRoy Percy of Greenville, Oscar Johnston of Clarksdale, Alex Y. Scott of Rosedale and Ben Saunders of Swan Lake. Immediately after organizing in Tennessee, Staplcotn domesticated in Mississippi, and its principal office has always been in Greenwood.

The first recorded meeting of organizing directors was May 25, 1921 in Greenwood. Attending were Oscar Bledsoe, Senator LeRoy Percy, Oscar Johnston, Will Dockery, J.H. Sherard, J.M. Yeager, C. C. Moore,D.L.Bingham, S. E Jones, J. G. McGehee, Alf Stone, G.G. Council, Alex Y. Scott, L. G. Dean and L. H. Gaines. Following this meeting, the organizing directors dispatched selected members to conduct "primary elections" to select permanent directors from each of the Association's districts. Oscar Johnston held an area election at the Clarksdale Chamber of Commerce. Ben Saunders, C. C.Moore and L. H. Gaines did the same at the courthouses in Sumner, Greenwood and Cleveland, respectively. G. G. Council chaired the election operations at his office in Greenville.

The newly elected permanent directors were all planters or owners of cotton plantations, and all were unquestionably top leaders in the area. Elected from the group of organizing directors were Oscar Bledsoe, D.L. Bingham, G.G. Council, L.G. Dean, Will Dockery, L.H. Gaines, Oscar Johnston, J.G. McGehee,C.C. Moore, Senator LeRoy Percy, Alex Y. Scott, J.H. Sherard, Alf Stone and J.M. Yeager. Also elected were T. R. Henderson, E. P. Peacock, A. M. Pepper, R. L. Pillow, Frank M. Robert Shaw, Ben E Saunders and M.P. Sturdivant. Percy, Johnston and Pepper were attorneys. Five of the new directors were presidents of banks and seven others were bank officers or directors.

GETTING ORGANIZED

On June 14, 1921, at a meeting at the Gayoso Hotel in Memphis, Oscar Bledsoe was elected president and chairman of the Association, and H. E. McIlwain was named temporary secretary. Director C. C.Moore was later selected as secretary pro tem. Alf Stone was elected vice president with a $200 monthly salary.

Also at this meeting, a report submitted by Certified Public Accountant George M. Powell showed $1,270.56 cash on hand, after $15,448.94 in disbursements. Unpaid obligations included $1,383.75 to Bledsoe for personally financed expenditures prior to organization and $5,000 to Memphis attorneys McGehee. Livingston, and Farabrough.

Cotton merchant W M. Garrard of Indianola, MS, presented a proposed general operating plan for an association sales department and the budget he deemed "necessary to successfully carry out these purposes.' No action was taken on Garrard's proposals.

Fifteen days later the board met again, this time in the offices of its Memphis lawyers, to hear Alf Stone's report about employment negotiations with Garrard. "Mr. Garrard agreed to head the marketing operation on the basis of 25 cents a bale, the Association contracting with him (of course, we cannot guarantee anything) that we promise the minimum would be $50,000 the first year, $75,000 the second, $100,000 the third, $125,000 the fourth and enough in the fifth year to make the total equal to $500,000, and in no two year period should the average exceed $100,000," Stone reported.

"I have been paying from two and a half percent to 25 or 30 percent to get my cotton sold, and when a man talks about handling it for 25 or 50 cents a bale, I am willing to sign up with him," he told the group.

"...This is July First. The life of this organization depends upon its survival in the first year, and that depends upon our ability to convert our commodity into money. Anybody knows that it takes a long time to establish connections and knows that the ultimate consumers or ultimate manufacturers of cotton have their connections established in this country and abroad. It is a slow, tedious proposition, and in this case your committee has felt that the only solution was the outright purchase of a going business. By that, I mean the brands, the good will of that concern which it has built up, the connections in North Carolina, South Carolina, New England connections and the foreign connections and, in addition to that, the undivided, continuous services of the head of that business and of the man who has made it the success it is. Mr. Garrard tells us he will absolutely sever his connections with his business associates; he will think of nothing and do nothing for the period of five years except to take care of this business and make it a success in every way he can."

Stone's report generated considerable discussion. All said the amount received by the manager was secondary to the cost per bale for handling the cotton by the Association.

Several directors, however, expressed "very decided opinions." The $100,000 annual salary guarantee would "make it not only exceptionally difficult to secure additional members, but in some instances would result in the withdrawal of present members," the Board minutes said.

At the suggestion of Senator Percy, the Board unanimously agreed to have Stone and director Pepper tell Garrard the attitude of the directors and the apprehension entertained if it accepts his proposition and its effect on the Association, 'but that we are willing to make it 25 cents a bale regardless of the baleage, except that we guarantee it will not be less than 216,000 bales." The same day, Staplcotn and Will Garrard signed a five year employment contract and formally began a relationship key to the success of the fledgling organization.

The Cotton Association, as it was long referred to, was organized as a non-stock incorporated cooperative because its founders felt it should not cost anything for a farmer to belong. However, a per bale handling fee was charged. To maintain a sound capital position, a portion of these handling fees was retained as equity reserves or simply reserves to provide the base capital on which the cooperative operates.

MEMPHIS SUPPORT

The Association had to fight the vested interest in the cotton trade just as it had to overcome the intense individualism of many planters. The Commercial Appeal of Memphis was quick to investigate this new organization which stood to impact the cotton trading business of many of its readers.

In July 1921, editor C. P. J. Mooney gave the movement his wholehearted support and that of his paper. Staplcotn's Board responded with its "appreciation of the valuable services rendered ... thus evidencing the fact of the desire and willingness of The Commercial Appeal and its editor to serve the best interest of the territory covered by it."

The following month the Association purchased advertising in The Commercial Appeal to explain its aims and methods. "This is a marketing association, pure and simple," the declaration of principles and policies said, in part.

"It is in no sense a holding or speculative concern. This organization of producers does not seek the destruction or hampering of any existing agency of commerce. Its aims are solely constructive in character. Its purpose is to promote the interests of its members, whose business is inseparably identified with the life of the communities in which they live. To further the welfare of the cotton grower is necessarily to foster the prosperity of the territory in which his cotton is grown.

"The Association will not make war on cotton buyers," the ad explained. "It will not engage in the business of supplying funds for cotton production; hence it will not compete with those who are so engaged," a position reversed when Staple Cotton Discount Corporation was organized three years later.

"The average production of American staple cotton, inch and one-eighth and better, is approximately 600,000 bales. Of such cotton, this association now controls, under irrevocable pledges of sale, more than 200,000 bales. This control is guaranteed under a five year contract, covering the years 1921 to 1925 inclusive, by and between the growers who compose the association," the ad continued.

"The association will probably control more than half of all the staple cotton grown in America, before the opening of the current year's operation. It is already the largest staple cotton selling agency ever developed in the history of the cotton industry," a prediction that did not go unnoticed by the cotton buyers in Memphis. The Association's relationship with another Memphis newspaper, The News Scimitar, would not be as cordial.

READYING FOR THE FIRST HARVEST

At its September 5 meeting in Clarksdale, the Bank of Clarksdale, the Bank of Commerce in Greenwood and the Citizen's Bank in Greenville were named "official depositories" for Staplcotn. Director G. G.Council of Greenville was hired as its general agent for $6,000 per year, including expenses and auto. The general agent was to be a combination membership solicitor, roving ambassador, trouble shooter and extension of general manager Garrard.

Council, with his Washington County farming operation and enthusiasm for Bledsoe's cooperative marketing concept, was ideally suited to help establish the Association in the Greenville area.

His position was discontinued the following June with thanks to Council for the way he discharged his duties." The Board felt Staplcotn's local office managers were better positioned to respond to member problems, an area originally seen as a major responsibility of the general agent. Vice president Stone took pains to assure that Board minutes showing this move in no way reflected upon the job done by his fellow Washington Countian. He reminded the Board that Council signed up "two, three, four times as many members as anyone else."

During its initial year, Staplcotn's meetings were held at the Elks Club and the Country Club in Greenwood, the Elysian Club in Greenville, the 830 Exchange Building in Memphis, the Stoneville Experiment Station, and the Clarksdale Chamber of Commerce. By their December 1 meeting, Board members settled on Greenwood as the regular meeting site and had established offices in Greenville, Clarksdale, and Memphis, as well as its first Greenwood office, located on the southwest corner of Fulton and Market Streets, across from the Leflore County Courthouse.

When Staplcotn began to function "there were 110,000 bales of cotton in Delta warehouses," reminisced Alf Stone in a 1935 Staple Cotton Review article. "It had no friends. Nobody wanted it. Nobody would advance money on it. Another crop was coming on. Business was stagnant. There was neither health nor hope in anything which had to do with Delta cotton. The Staple Cotton Association was organized to meet that situation."